Government took a major step to correct Nigeria’s economic problems by launching the Economic Recovery and Growth Plan (ERGP) in April 2017. But what has the government been able to achieve one and half year down the line?
Recall that the cardinal objective of ERGP is to serve as a catalyst for economic recovery through activation and rapid development of the non-oil sector to achieve a diversified economy. The vision is the restoration of economic growth, investment in people and building of a globally competitive economy, for the ultimate benefit of bringing about prosperity and happiness of all Nigerians based on the principles of equity, justice and fair play, irrespective of ethnicity, religion, or political persuasion.
So on March 12 to April 22, government took the first major step to actualising the ERGP when it organised Malaysian-style focus labs in Abuja. The workshop brought together stakeholders including investors, financiers, experts and top government functionaries at the level of decision makers for the purpose of identifying and eliminating impediments that could scuttle ERGP.
Besides identifying possible obstacles to the realisation of the goals of the economic plan, the event was held to unlock potential for investment and drive growth in the three broad areas it focuses on, which are agriculture and transportation, manufacturing and solid minerals development, as well as power and infrastructure.
The focus labs were the first of their kind in the country, according to findings. Apart from the general problems that affect basically every investor in the country, like poor infrastructure, lack of access to credit and regulatory policies that are sometimes detrimental to economic growth, the event afforded participants opportunity to get a listening ear to some problems that were peculiar to them, with the unprecedented benefit of having bespoke solutions designed to solve those problems.
The immediate fallout of the focus labs was that they would unlock $22. 5 billion worth investments by 2020, from the 164 projects that were identified at the event as having high potential, out of which $10 billion investment projects are ready for immediate development.
Vice President Yemi Osinbajo, who took part in the focus labs, said the identified projects are forecast to create more than half a million jobs for Nigerians up until 2020, which is a demonstration of the far-reaching impact of ERGP focus labs in unleashing a brighter future for the country.
Since power supply has been the major encumbrance to industrialisation, the plan seeks to address once and for all what has been the greatest impediment to economic development by not only encouraging private participation in the power sector, but also offering incentives to those involved in the sector. Consequently the FG appropriated a budget of N2.86 trillion as capital expenditure to finance infrastructure projects in 2018, with power taking a significant portion. The figures for 2016 and 2017 were N1.2 trillion in 2016 and N1.44 trillion, respectively.
According to Osinbajo, at this year’s Nigerian Economic Summit, in terms of actual capital spend, government has put in a total of N2.7 trillion on capital projects that cover investments in rail, roads, power and dams – the highest by any government in the country.
There are few examples we can point to. Economic activities in the Aba area of Abia State, known to be the industrial capital of the South East famously known for ‘Aba-made’ products has virtually been without power, forcing small scale industries to rely on electricity generating sets, with the consequence of very low capacity utilisation. That is about to be a thing of the past.
Geometrics Power Limited, the company that is handling the Aba Independent Power Project (IPP) that covers nine local government areas in what is known as the Aba Ring Fence, is one of the companies that participated in the Abuja focus labs. The company’s participation in the progamme now places it in good stead to deliver uninterrupted power to the area. And the benefits of that participation are not difficult to fathom.
On a national scale, completion of the Aba IPP will boost power generation in the country and take it significantly higher than the seven thousand megawatts that was achieved as at middle of this year (About five thousand megawatts are currently being distributed).
It is argued that on a regional level, regular power supply in Aba will trigger the growth of many businesses in a long value chain, with positive impact on job creation and raising of the standard of living of people in different parts of the country, which is what the ERGP seeks to achieve.
It will bring about resuscitation of the shoe industry in Aba, which has remained moribund for a long time. This will in turn revamp the hide and skin business in faraway places in the northern part of the country, like Sokoto, where the main raw material comes from. There is also the aspect of the potential boost to the business of transporters of the raw material from the north to Aba.
Facilitating the objectives of the ERGP is the Anchor Borrowers Programme (ABP). Through this program that is handled by the Central Bank of Nigeria using 13 banks, credit amounting to N120.6 billion is reported to have been extended to 720, 000 smallholder farmers for financing of small holder farms. These farmers cultivate about 12 commodities that include rice, wheat, soya beans, cassava, cotton, groundnut, poultry, etc, in the 36 states of the federation and the Federal Capital Territory.
Reports say that about N82 billion out of the N120.6 billion credit under the ABP went to 350, 000 rice farmers. This has seen an increase in rice cultivation from 2.5 metric tonnes in 2015 to four metric tonnes in 2017, making the target of ending rice importation in 2019 realisable.
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